Maravilla v. Commissioner of Internal Revenue

FOURTEENTH DIVISION [CA-G.R. SP No. 45535. August 19, 1999.] EDUARDO Q. MARAVILLA , petitioner , vs . COMMISSIONER OF INTERNAL REVENUE , respondent . D E C I S I O N GOZO-DADOLE , J p : This is an appeal taken from the Decision dated April 21, 1997 by the Court of Tax Appeals dismissing the petition instituted by herein petitioner before that court to quash a Warrant of Distraint and from the Resolution promulgated on July 8, 1997 denying petitioner's Motion for Reconsideration, under Rule 43, 1997 Rules of Civil Procedure as amended, praying that another one be entered declaring as null and void the warrant of distraint and levy issued by the respondent. The antecedent facts. A Petition for Review dated August 9, 1995 was filed before the Court of Tax Appeals praying that the Warrant of Distraint and Levy issued by the respondent against herein petitioner be quashed on the ground that it was based on an assessment which was not served on herein petitioner hence, it has not become final so as to be enforced by a Warrant of Distraint and Levy. A Motion to Dismiss in the aforementioned petition was filed by the respondent which was denied by the Court of Tax Appeals and so, respondent filed her Answer dated May 20, 1996 and after the parties have submitted their memoranda, a Decision dated April 21, 1997 was rendered by the Court of Tax Appeals dismissing the petition on the ground that it has no more jurisdiction as the subject assessment has already become final and unappealable. On May 15, 1997, petitioner filed a Motion for Reconsideration dated May 14, 1997 with the Court of Tax Appeals which motion was denied per Resolution promulgated on July 8, 1997. That due to the failure of herein petitioner to pay his deficiency capital gains tax for the calendar year of 1988 in the amount of P1,178,437.26, a Warrant of Distraint and Levy dated July 17, 1991 was issued against him by the respondent and which warrant of distraint was served at the petitioner's office at No. 65 Mandalagan Street, Bacolod City by Revenue Officer II Carmen V. Parreo through petitioner's representative Cesar Alamon. This Warrant of Distraint and levy was based on Income Tax Assessment Notice No. FAN 88-90-000968 dated March 29, 1990 issued by the respondent for tax deficiency of petitioner which the latter did not actually received because this was served at No. 6 Oakville Street, Quezon City as shown on the face of the assessment notice itself when petitioner still and has been a resident of No. 65 Mandalagan Street, Bacolod City and which latter address is the one reflected in his Income Tax Return on file with the respondent's office. Hence, this appeal under Rule 43 of the 1997 Rules of Civil Procedure as amended assigning the following error: "THAT IT WAS A PALPABLE ERROR OF THE COURT OF TAX APPEALS TO DISMISS THE PETITION ON THE GROUND OF LACK OF JURISDICTION CONSIDERING THAT SINCE THE ASSESSMENT NOTICE NO. FAN 88-90-000968 DATED MARCH 29, 1990 HAS NOT BEEN SERVED ON HEREIN PETITIONER, THIS ASSESSMENT HAS NOT BECOME FINAL AND SO THE WRIT OF DISTRAINT AND LEVY BASING ON THE SAME IS NULL AND VOID" The admitted and uncontroverted facts are: (a) that the Income Tax Assessment Notice No. FAN 88-90-000968 dated March 29, 1990 issued by the respondent for the deficiency capital gains tax of P1,178,437.26 of Eduardo Maravilla of No. 6 Oakville Street, Quezon City was not served on the petitioner because he has never been a resident of No. 6 Oakville Street, Quezon City but at No. 65 Mandalagan Street, Bacolod City which is and has been his address as so reflected in his Income Tax Return; and (b) the issuance of the Warrant of Distraint and Levy dated July 17, 1991 was based on the Tax Assessment Notice No. FAN 88-90-000968 dated March 29, 1990. Consequently, it is the contention of herein petitioner that the issuance of Warrant of Distraint and Levy dated July 17, 1991 is null and void and as such, the Court of Tax Appeals has jurisdiction to review by appeal his case. To resolve this assigned error, determination must first be made whether there was already a decision by the respondent regarding or involving the disputed Assessment Notice No. FAN 88-90-000968 which could be made a subject for review by appeal before the Court of Tax Appeals which has exclusive appeal before the Court of Tax Appeals which has exclusive appellate jurisdiction over the matter and whether the petition for review by appeal was filed within the reglementary period as so provided by law. The law applicable in this case is Section 7, paragraph 1 of RA No. 1125 which provides: "SECTION 7. Jurisdiction . The Court of Tax Appeals shall exercise exclusive appellate jurisdiction to review by appeal, as herein provided (1) Decisions of the Collector of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising under the National Internal Revenue Code or other law or part of law administered by the Bureau of Internal Revenue; xxx xxx xxx" in relation to Section 11 of the same RA No. 1125 which provides: "SECTION 11. Who may appeal, effect of appeal . Any person, association or corporation adversely affected by a decision or ruling of the Collector of Internal Revenue, the Collector of Customs or any provincial or city Board of Assessment Appeals may file an appeal in the Court of Tax Appeals within thirty days after the receipt of such decision or ruling. xxx xxx xxx" This contention of the petitioner is bereft of merit being contrary to the facts and evidence presented in this case. Records of this case show that last January 25, 1993 therein petitioner received the subject Warrant of Distraint and Levy through his representative Cesar Alamon but it was only through a letter dated March 4, 1993 that his attorney-in-fact Francisco W. Maravilla has requested the Regional Director of Bacolod City to hold the Warrant of the Distraint and Levy in abeyance pending the final action of the respondent on the petitioner's protest which protest referred to the letter of Sycip, Gorres and Velayo dated March 1, 1993 and signed by S. U. Salvador, Jr. stating that the sale of the lands which led to the deficiency capital gains tax assessment of 1998 of petitioner is also the subject of an earlier assessment issued against petitioner for the taxable year 1987. This request was granted through a letter dated March 23, 1993 by the Assistant Regional Director of Bacolod City and since the request for the cancellation of the petitioner's assessment and the recall of the Warrant of Distraint and Levy was lodged with the national office of the respondent, the Regional Director in Bacolod City forwarded the records of petitioner's case to that office. LLjur On October 22, 1993 respondent's National Audit Review Division sent a letter to S.U. Salvador, Jr. of Sycip, Gorres and Velayo and Co. requesting him to submit documentary evidence proving that petitioner has already paid his capital gains tax liability, for which there was no response or action taken on the part of the petitioner so, on May 20, 1994, respondent Regional Director in Bacolod City recommended to the City Prosecutor the criminal prosecution of petitioner for his refusal and/or failure to pay his capital gains tax liability for 1988, a violation of Section 21 (e) of the Tax Code as amended and punishable under Section 254 of the same Code. On September 12, 1994, the City Prosecutor issued a Resolution recommending the filing of a criminal action in court. Said action was filed and docketed as Criminal Case No. 94-16717 in the Regional Trial Court of Bacolod City, Branch 49. On September 1, 1995, petitioner filed with the Court of Tax Appeals the Petition to Quash the Warrant of Distraint and Levy. (1) In the case of the Assessment No. FAN 1-87-90-001948 dated September 18, 1990 which was for the same deficiency capital gains tax in the amount of P1,178,437.26 for which petitioner has filed a letter protest dated October 17, 1990 but which he failed to appeal to the Court of Tax Appeals on time considering that after the filing of the letter protest of October 17, 1990, he did not do anything about if anymore and because of his inaction, the Assessment No. FAN 1-87-90-001948 dated September 18, 1990 has become final since Section 229, particularly the last 2 paragraphs thereof of the National Internal Revenue Code is very explicit on this point which provides: "Such assessment may be protested administratively by filing a request for reconsideration or reinvestigation within thirty (30) days from receipt of the assessment in such form and manner as may be prescribed by implementing rules and regulations. Within sixty (60) days from filing of the protest, all relevant supporting documents shall have been submitted; otherwise, the assessment shall become final. If the protest is denied in whole or in part, or is not acted upon within one hundred eighty (180) days from submission of documents, the taxpayer adversely affected by the decision or inaction may appeal to the Court of Tax Appeals within thirty (30) days from receipt of the said decision, or from the lapse of the one hundred eighty (180)-day period; otherwise, the decision shall become find, executory and demandable." (2) In the case of Assessment No. FAN 1-88-90-000968 dated March 29, 1990 which he accordingly did not receive, yet he admitted to have received the Warrant of Distraint and Levy dated July 17, 1991 on January 25, 1993 through his representative Cesar Alamon. But despite the receipt of this Warrant of Distraint and Levy, he did not do anything until his attorney-in-fact, Francisco W. Maravilla through a letter dated March 4, 1993 has requested the Regional Director of the respondent's office at Bacolod City to hold in abeyance the Warrant of Distraint and Levy until the protest of March 1, 1993 could be acted upon which if computed from January 25, 1993 to March 1, 1993 more than a month has already lapse and again petitioner has lost his right to appeal to the Court of Tax Appeals in order to question this Warrant of Distraint and Levy considering that in accordance with Section 11 of RA No. 1125, petitioner has only thirty (30) days after the receipt of the Warrant of Distraint and Levy within which to appeal the same. LexLib Thus, the case of Commissioner of Internal Revenue vs. Algue, Inc., 159 SCRA 9, the Supreme Court ruled: "it is true that as a rule, the Warrant of Distraint and Levy" is proof of the finality of the assessment" and "renders hopeless a request for reconsideration", being tantamount to an outright denial thereof and makes the said request deemed rejected. But there is a special circumstance in the case at bar that prevents application of this accepted doctrine." llcd so, the mere fact that a Warrant of Distraint and Levy is already issued, this will not render hopeless the reconsideration if petitioner can prove that within the reglementary period, he was able to file protest but which in this case, he did not. WHEREFORE, foregoing premises considered, this petition is hereby DENIED DUE COURSE and consequently dismissed . SO ORDERED. Barcelona and Demetria, JJ . , concur.